Rent Control in Orange County!?

Pearson RE Group
Jun 29, 2018
3 min read

Supporters of a state ballot initiative to expand rent control options for cities across California have gathered enough signatures to qualify the measure for the November 2018 ballot.

If passed, the measure would repeal the 1995 Costa Hawkins Rental Housing Act, which sets limits on the kind of rent control policies cities are able to impose.

Right now, 15 California cities have rent control policies. In Southern California, that includes the cities of Los Angeles, West Hollywood, Santa Monica, Thousand Oaks, and Beverly Hills.

With rising housing costs around the state, the number of cities with rent control policies could soon increase. Tenant advocates are pushing for measures regulating rent prices in Long Beach, Inglewood, Pasadena, and Santa Ana.

On one side, tenant unions want to repeal the law. They are concerned with low- and middle-income earners, elderly and disabled tenants being forced out of their neighborhoods due to lack of housing supply, unaffordability and high rent.

Property owners on the other side are worried that repealing Costa-Hawkins could financially hurt a majority of apartment owners and drive them out of business.

A recent Chapman University poll revealed Fifty-nine percent of Orange County residents said they support rent control, while just 41 percent opposed it.

The 60-40 split reflected in the Chapman poll also defies the expectation created by the makeup of survey respondents: Only 41 percent of the 706 people who took part are renters.

Just one of Orange County’s 34 cities — San Juan Capistrano — has any form of rent control, and it’s limited to mobile homes.

What would happen if it were repealed?

In the short term, not much. Assembly member Richard Bloom, who introduced a recently failed repeal bill, has said that getting rid of Costa Hawkins would only give cities greater flexibility when setting rent control policies. Cities would still need to go through the process of passing new legislation before the repeal would have any effect.

With new options available, some cities might expand rent control regulations to prevent landlords from raising rent on a unit to market rate once a tenant moves out as an effort to preserve affordable housing. Other cities might choose to leave their current rent control laws intact.

COSTA HAWKINS, EXPLAINED

What is Costa Hawkins? It’s a decades-old California law that makes it illegal for cities to adopt certain kinds of rent control ordinances. There is a big push by renters’ groups and some state lawmakers to repeal it, lifting the restrictions.

What are the restrictions? Single family homes and condominiums are exempt from rent control under this state law. So is any apartment built after 1995, when Costa Hawkins was passed, or in some cases much earlier. If a city adopted rent control in 1980, for example — as Oakland and Berkeley did — then that is the cutoff; nothing built afterward can be subject to rent control. Costa Hawkins also prohibits cities from having a say in how much a landlord can raise the price after a tenant moves out, a policy known as vacancy control.

How many cities in California have some form of rent control? At least 15, according to the Department of Consumer Affairs, including Berkeley, Beverly Hills, Campbell, East Palo Alto, Fremont, Hayward, Los Angeles, Los Gatos, Oakland, Palm Springs, San Francisco, San Jose, Santa Monica, Thousand Oaks, and West Hollywood.

Sources: https://www.ocregister.com/2018/06/01/rent-control-is-no-solution-to-our-housing-crisis/ https://www.ocregister.com/2018/05/28/grand-theft-housing-and-owners-who-cant-vote-with-their-feet/ https://www.ocregister.com/2018/03/01/initiative-to-repeal-californias-rent-control-restrictions-hits-milestone-2/ https://la.curbed.com/2018/1/12/16883276/rent-control-california-costa-hawkins-explained/ https://la.curbed.com/2018/4/23/17270880/costa-hawkins-repeal-california-rent-control-garcetti/ http://www.globest.com/2018/05/22/will-the-costa-hawkins-repeal-pass/

Do you have questions, concerns, or comments about Costa Hawkins and/or how it may effect your coastal investment property? We'd love to hear from you! #Make informed decisions